Little Progress Achieved in G20 Fight Against Tax Evasion
April 1st, 2011
April 1st, 2011
A report from Spanish observatory on foreign affairs from the Fundación alternativas, reveals that measures adopted by the G20 to fight against tax havens and tax evasion have not been implemented yet. The report entitled “The fight against tax havens and tax evasion: Progress since the London G20 summit and the challenges ahead” proposes ways to implement measures that have already been adopted.
The financial crisis in 2008 highlighted the harmful effect of tax havens on the economy of developed and developing countries. It was a key issue at the G20 London Summit in April 2009, where leaders announced a number of important steps to combat tax havens. However, that initial drive has gradually lost momentum.
The measures agreed at the London Summit have proven incomplete, and in subsequent summits G20 leaders have expressed good intentions but have not taken concrete measures. It is hoped that the next summit in Cannes (November 2011) will re-launch important aspects of the fight against harmful tax practices.
On the other hand, during the Spanish and Belgian presidencies of the EU in 2010, some important steps were taken towards greater transparency in the international financial system – and in the practices of multinational companies. These measures, if fully implemented, could have a significant impact.
The Fundación alternativas’s new report aims to provide an account of what has been achieved so far at a various G20 summits and through EU initiatives. It also seeks to build on the important work carried out by the Spanish government in the fight against tax evasion and tax havens and presents proposals for implementing the measures that have previously been adopted. These proposals can be grouped into two areas: those that improve cooperation and the exchange of information between states, and those that improve the transparency of multinational companies (MNCs).
Improve cooperation and the exchange of information between states:
Improve the transparency of multinational companies (MNCs):
There are several ways in which CBC reporting could be addressed. Companies could self-select for voluntary CBC reporting, most notably through the Extractive Industries Transparency Initiative (EITI) or the OECD, which is currently considering incorporating CBC reporting. States could also enact legislation aimed at their stock markets, such as the Dodd-Frank legislation in the United States. At EU level, it is important to take advantage of the current review of the Transparency Obligations Directive (TOD) in order to include Recital 14 in the main body of the directive. Doing this would convert the voluntary CBC reporting into a compulsory requirement for extractive industry MNCs that participate in EU capital markets, in harmony with stock market legislation in the United States and Hong Kong.
The international community could also modify the standards set by the International Accounting Standards Board (IASB). To this end, the report suggests two possible courses of action:
Whichever course of action, the report stresses the urgent need for international coordination on taxation, and for a more effective battle against one of the greatest scourges of our time: the dispossession of important resources from states and citizens.
🚨@FinTrCo & 36 global civil society orgs call for US to tackle its black hole of financial secrecy undermining demo… https://t.co/c9YXSj1fUm
- Wednesday Mar 29 - 2:32pm